Leaking Underground Storage Tank Trust Fund: Petroleum Marketers Association of America (and Other Groups) June 16th Letter to House Committee on Appropriations Addressing Funding

Mitchell Williams Selig Gates & Woodyard PLLC
Walter Wright

July 5, 2017

The Petroleum Marketers Association of America along with the National Association of Convenience Stores, National Association of Truck Stop Operators, and Society of Independent Gasoline Marketers of America (collectively “PMAA”) sent a June 16th letter to the Chairman and Ranking Member of the United States House of Representatives Committee on Appropriations addressing the federal Leaking Underground Storage Tank Trust Fund (“LUST Fund”).

The focus of the joint letter was opposition to the President’s FY 2018 budget request of $47 million for the LUST Fund arguing the amount is inadequate.

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Department of Justice Ends Controversial Third-Party Settlement Practice—What Will It Mean for Supplemental Environmental Projects?

Taft Stettinius & Hollister LLP
Will Gardner and Kimberly S. Lewis

July 6, 2017

On June 7, U.S. Attorney General Jeff Sessions issued a memorandum prohibiting the Department of Justice (“DOJ”) and the 94 U.S. attorney’s offices from entering into settlement agreements that provide for payment to a nongovernmental, third party that was not directly harmed by the conduct at issue. Settlement payments to third-party, non-governmental organizations (“NGO”) became commonplace during the Obama administration, with millions of dollars in settlement payments going to NGOs.

Third-party payments were used in a number of the Obama administration’s most high-profile settlements, including, the BP plea agreement regarding Deep Water Horizon ($350 million to the National Academy of Sciences), the mortgage lending settlements with JP Morgan, Citi and Bank of America (millions of dollars to NeighborWorks America and others), and the settlement with Volkswagen regarding vehicle emission testing ($2 billion in settlement payments for investment in zero-emission vehicle infrastructure, such as electric charging stations, to benefit both the public and various NGOs).

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NYSDEC Set to Propose Revisions to the Brownfield Cleanup Program: A Preview of Changes

Phillips Lytle LLP
Laura L. Mona

June 30, 2017

A preview of at least some of the proposed revisions to the New York State Department of Environmental Conservation’s (“NYSDEC”) regulations for the Brownfield Cleanup Program (“BCP”) (6 N.Y.C.R.R. Part 375) was revealed in May 2017, with official release anticipated later this year. Key changes are expected to include new program and tax credit eligibility requirements as well as clarifications to aspects of program implementation, all in an effort to provide more consistency across remedial programs and to generally update the BCP, now over a decade old. To what extent the revisions will provide clarity to BCP applicants remains to be seen once the changes are officially published. However, the preview reveals there is likely to be more questions and concerns than answers.

New eligibility requirements will likely include a formalized obligation for BCP applicants to conduct a search for potentially responsible parties (“PRPs”) before the application will be deemed complete. The scope and extent of PRP searches are expected to be outlined in the proposed regulations and will likely warrant close review as PRP searches can be time-consuming and costly.

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CERCLA Due Diligence Requirements Revised to Reflect Updated Phase I Standard for Forested and Rural Land

Spencer Fane LLP
Paul Jacobson

July 11, 2017

Purchasers of rural and forested land need to be aware of a recent change in EPA’s environmental due diligence rules. On June 20, 2017, EPA published a Direct Final Rule in the Federal Register, amending the All Appropriate Inquiries (AAI) Rule, 40 CFR Part 312, to reflect 2016 updates to ASTM E2247, a standard for Phase I investigations on rural and forested land. The AAI Rule sets forth requisite practices for satisfying CERCLA § 101(35)(B) so as to obtain CERCLA liability relief, i.e. the innocent landowner defense, bona fide prospective purchaser liability protection, and contiguous property owner liability protection. The AAI requirements also apply when conducting site characterizations and assessments with the use of a Brownfields grant, under CERCLA § 104(k)(2)(B).

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The Environmental Regulatory Reforms Manufacturers Want Most

Husch Blackwell LLP
Charles E. Merrill

June 14, 2017

U.S. manufacturers and their trade associations have submitted comments to the U. S. Department of Commerce (DOC) on changes they would like to see in environmental regulations. President Trump’s Memorandum of January 24, 2017, “Streamlining Permitting and Reducing Regulatory Burdens for Domestic Manufacturing”[1] directed the DOC to conduct outreach concerning the impact of Federal regulations on domestic manufacturing. This article reviews manufacturers’ responses to DOC on environmental issues.

The DOC sought input on:

The impact of Federal permitting requirements on the construction, expansion, or operation of domestic manufacturing facilities, and possible Federal actions to streamline permitting. Regulations that adversely impact domestic manufacturers, including compliance burdens for facility construction, expansion, or operation.[2]

DOC asked about the number of permits required; the time required to obtain permits; duplication or overlapping of permits; the most onerous features of permits; and suggestions for improvement of the permitting process. DOC received over 170 comments by its March 31, 2017 deadline on a wide range of federal regulations. The comments are available at: https://www.regulations.gov/docketBrowser?rpp=25&so=DESC&sb=commentDueDate&po=0&dct=P S&D=DOC-2017-0001.

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Monetizing Vacant Land Through Mitigation Banking

Sullivan & Worcester LLP
Jerome C. Muys, Jr.

June 13, 2017

A mitigation bank is a wetland, stream, or other habitat area that has been restored, established, enhanced, or (in certain circumstances) preserved for the purpose of providing compensation for unavoidable impacts to such natural resources. When a corporation or other entity undertakes these activities, it can generate “compensatory mitigation credits” (“CMCs”), which in recent years have significantly increased in value. Corporations and other owners of brownfield or dormant/underutilized properties are increasingly using these lands to create mitigation banks in order to generate CMCs that can be sold into the mitigation market.

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Waters of the United States Rule Update

Dinsmore & Shohl LLP
Anna Skinner

May 30, 2017

One of the first environmental measures the Trump administration took was issuing Executive Order 13778 directing the Environmental Protection Agency (EPA) to review and either rescind or revise the 2015 Clean Water Rule: Definition of “Waters of the United States” (WOTUS Rule). The WOTUS Rule was promulgated under the Clean Water Act (CWA), which defines the scope of CWA jurisdiction as “navigable waters of the United States.” The scope of “navigable waters of the United States” has been hotly debated in several court cases since the CWA was enacted. The WOTUS Rule sought to define which rivers, streams, lakes and marshes fell under the definition of “navigable waters of the United States.” See 80 Fed. Reg. 37054 (June 19, 2015). The WOTUS Rule took the approach of Justice Anthony Kennedy’s concurring opinion in Rapanos v. United States that navigable waters include any water body that has a “significant nexus” to navigable rivers and seas, including through biological or chemical connections. See 547 U.S. 715, 759 (2006).

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Administrator Pruitt Seeks Superfund Overhaul

K&L Gates
Cliff L. Rothenstein, Ankur K. Tohan, David L. Rieser and Kathleen L. Nicholas

May 30, 2017

In a May 22 memo, the Environmental Protection Agency (“EPA”) Administrator Scott Pruitt created a task force to look at ways of streamlining the Superfund program. The task force, to be led by senior advisor Albert Kelly, shall include the heads of “the Office of Land and Emergency Management, the Office of Enforcement and Compliance Assurance, the Office of General Counsel, EPA Region 3 (as the lead region for the Superfund program) and other offices as appropriate.” The initiative’s goals are to expedite the cleanup process and reduce the burden on compliant parties. Within 30 days, the task force is charged with providing a detailed set of recommendations on actions that the agency can take to:

  • streamline and improve efficiencies within the program;
  • overhaul or streamline incentives for private investment at sites;
  • improve risk-management and consistency in remedy selection;
  • “Utilize alternative and non-traditional approaches for financing site cleanups, as well as improvements to the management and use of Superfund special accounts;” and
  • improve stakeholder relations and reduce administrative costs.

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Pennsylvania Commonwealth Court Confirms “Continuous Trigger” for Latent Environmental Property Damage Claims

K&L Gates
John M. Sylvester and John M. Hagan

April 26, 2017

In a significant decision for Pennsylvania insurance law, the Pennsylvania Commonwealth Court has ruled that a “continuous trigger” of coverage applies to long-term, latent environmental property damage claims. Specifically, in Pennsylvania Manufacturers’ Association Insurance Co. v. Johnson Matthey Inc.,1 a unanimous panel of the court rejected an attempt by the insurer, Pennsylvania Manufacturers’ Association Insurance Company (“PMA”), to apply a “first manifestation” trigger of coverage for the environmental coverage claim of the policyholder, Johnson Matthey Inc. (“Johnson Matthey”), under “occurrence-based” policies that PMA issued to Johnson Matthey in the 1960’s and 1970’s. Rather, the Court observed that the record of the case presented a long latency of continuing, undetected property damage taking place during the PMA policy periods, which supported a continuous trigger throughout that latency period, such as that adopted by the Pennsylvania Supreme Court for asbestos bodily injury claims in its seminal decision, J.H. France Refractories Co. v. Allstate Insurance Co.2 The Commonwealth Court rejected PMA’s argument that a recent Pennsylvania Supreme Court decision, Pennsylvania National Mutual Casualty Insurance Co. v. St. John,3 which had applied a “first manifestation” trigger to a non-environmental property damage coverage claim, should be followed in this case.

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EPA Retracts CERCLA Remedy Selection Authority from Regional Offices for Remedies that Exceed $50 Million

Beveridge & Diamond PC
Pamela D. Marks, Steven M. Jawetz and Gayatri M. Patel

May 11, 2017

On May 9, 2017, EPA Administrator Scott Pruitt issued two new delegations under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA or Superfund) that limit to the Administrator (and possibly the Deputy Administrator) the authority to select remedies estimated to cost over $50 million. One delegation concerns Superfund sites generally; the other relates to federal facilities. Previously, all remedy selection was delegated to the Assistant Administrator for Office of Land and Emergency Management and the Regional Administrators. The authority to sign Records of Decision estimated to cost less than $50 million remains with those officials. A copy of the revised delegations and accompanying memorandum are available here.

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